Continental Resources Inc (CLR) 8-K The Oil & Gas Conference

The Oil & Gas Conference   

August 11, 2008

Exhibit 99.1

1

Forward Looking Statements

This

presentation

includes

forward-looking

information

that

is

subject

to

a

number

of

risks

and

uncertainties,

many

of

which

are

beyond

the

Company’s

control.

All

information,

other

than

historical

facts

included

in

this

presentation,

regarding

strategy,

future

operations,

drilling

plans,

estimated

reserves,

future

production,

estimated

capital

expenditures,

projected

costs,

the

potential

of

drilling

prospects

and

other

plans

and

objectives

of

management

is

forward-looking

information.

All

forward-looking

statements

speak

only

as

of

the

date

of

this

presentation.

Although

the

Company

believes

that

the

plans,

intentions

and

expectations

reflected

in

or

suggested

by

the

forward-looking

statements

are

reasonable,

there

is

no

assurance

that

these

plans,

intentions

or

expectations

will

be

achieved.

Actual

results

may

differ

materially

from

those

anticipated

due

to

many

factors,

including

oil

and

natural

gas

prices,

industry

conditions,

drilling

results,

uncertainties

in

estimating

reserves,

uncertainties

in

estimating

future

production

from

enhanced

recovery

operations,

availability

of

drilling

rigs,

pipe

and

other

services

and

equipment,

availability

of

oil

and

natural

gas

transportation

capacity,

availability

of

capital

resources

and

other

factors

listed

in

reports

we

have

filed

or

may

file

with

the

Securities

and

Exchange

Commission.

This

presentation

also

includes

information

on

reserves

potentially

recoverable

through

additional

drilling

or

enhanced

recovery

operations.

Non-proven

estimates

are

generally

not

permitted

to

be

disclosed

in

SEC

filings

and

are

subject

to

a

substantial

risk

of

not

being

realized.

2

Company Overview

Completed IPO in May 2007 (NYSE:CLR)

~$8 billion market capitalization

Founded 1967 by Harold Hamm, Chairman & CEO

2

nd

largest oil producer in the Rockies

Organic growth strategy focused on unconventional resource plays

L3

years

reserve

adds

–

99%

through

the

drill

bit

2007 daily production 29,099 boepd > 2X 2004 level of 14,121 boepd

Focus on hz drilling: >500 hz wells drilled

82% of proved reserves / 76% of production from unconventional resources

~1 million net undeveloped acres concentrated in unconventional resource plays

Strong financial results

$245MM

in

2Q08

EBITDAX

–

an

increase

of

125%

over

2Q07

$220MM of bank debt outstanding as of 6/30/08

100% of oil and gas production unhedged

3

$116

$285

$372

$427

$470

2004

2005

2006

2007

1H 2008

Investment in Asset Base

EBITDAX ($mm)

14,121

19,751

24,707

29,099

31,623

2004

2005

2006

2007

2Q 2008

Production (boepd)

Cash used in investing activities ($mm)

$184

$245

$30

$130

$53

$21

$207

$13

Red River Units

Bakken

Other Rockies

Woodford

Other Mid-Con

Gulf Coast

Land & Seismic

Other

2008 Capex by Region -

$883 MM

$73

$134

$325

$483

$276

2004

2005

2006

2007

1H 2008*

* Excludes $71MM for acquisitions.

4

Financial and Operating Summary

1 

Excludes

impact

of

price

commodity

derivative

contracts

covering

period

from

August

2007

through

April

2008.

2 

See

page

30

of

second

quarter

Form

10Q

and

earnings

release

for

a

reconciliation

of

net

income

to

EBITDAX.

3

Operating

statistics

per

boe

sold.

Oil

sales

volumes

are

35

Mbbls

more

than

oil

production

volumes

for

1H

2008;

and

221

Mbbls

and

21

Mbbls

less

than

oil

production

volumes

for

2007

and

2006,

respectively.

Years ended December 31,

2005

$52.45

$6.93

15,638

24,674

19,751

$285,344

$50.19

7.32

2.22

2.43

$11.97

$38.22

2006

$55.30

$6.08

20,493

25,274

24,707

$372,115

$52.09

6.99

2.48

2.24

$11.71

$40.38

2007

$63.55

$5.87

23,832

31,599

29,099

$469,885

$58.32

7.35

3.13

1.92

$12.40

$45.92

1H 2008

$104.43

$8.25

24,080

41,098

30,930

$426,738

$92.34

8.83

5.38

2.46

$16.67

$75.67

Realized oil price ($/bbl)¹

Realized natural gas price ($/Mcf)

Oil production (boepd)

Natural gas production (Mcfd)

Total production (boepd)

EBITDAX ($000’s)²

Key Operational Statistics³

Average oil equivalent price¹

Production expense

Production tax

G&A (ex non-cash equity compensation)

Total cash costs

Cash margin

2004

$38.85

$5.06

10,104

24,093

14,121

$116,498

$36.45

8.49

2.39

2.02

$12.90

$23.55

5

Operational Overview

Red River Units 50%

Bakken Field 25%

Other Rockies -

7%

Mid-Continent 11%

Gulf

Coast

<1%

Total proved reserves (12/31/07) = 134.6 MMboe

74% PDP /  77% oil / 12.7 R/P / Operate 93% of PV-10%

Unconventional

82%

Red River Units 43%

Bakken Field 27%

Other Rockies -

8%

Mid-Continent 14%

Gulf Coast

2%

Avg. daily production (Q2 2008) = 31.6 Mboepd

Unconventional

76%

1,306 net producing wells with

>1,000 net drilling locations

Mid-Continent

Proved reserves: 24.3 MMboe

Gulf Coast

Proved reserves: 0.3 MMboe

Rockies

Proved reserves: 110.0 MMboe

Proved Reserves by Geography

Production by Geography

Woodford -

6%

Woodford -

7%

Gulf Coast

Proved reserves: 0.3 MMboe

Rockies

Proved reserves: 110.0 MMboe

Regional office

Headquarters

Counties with acreage    

holdings are highlighted

6

Key Drilling Projects

Development (36% 2008 D&C capex)

Red River Units: 50% proved reserves and

43% production

Montana Bakken Shale: 20% proved

reserves and 20% production

Impact plays (48% 2008 D&C capex)

North Dakota Bakken Shale: 376,000 net

acres

Oklahoma Woodford Shale: 46,000 net

acres

Estimated exit rate 43,000 boepd          

(36% increase over 2Q 2008)

13 operated drilling rigs at Jan. 2008

29 operated drillings currently, with 35

planned by year end

Red River

Units

MT

Bakken

ND

Bakken

Arkoma

Woodford

Counties with acreage    

holdings are highlighted

Regional office

Headquarters

Development

Impact Plays

7

CLR Unconventional Resource Plays

~1,000,000 net acres in unconventional plays and growing

Shale Basin

Overthrust Belt

Marfa Woodford/

Barnett –

67,000

Anadarko Woodford –

95,000

Atoka –

32,000

Lewis –

27,000

Arkoma Woodford

–

46,000

Haynesville –

20,000

New Albany –

46,000

Marcellus, Rhinestreet,

Huron –

88,000

Bakken –

529,000

Red River –

77,000

8

Rocky Mountain Operations

ND Bakken

9

Red River Units

Cedar

Hills

Units:

the

13th

largest

onshore

L48 oilfield

Development started in 1995 with horizontal

drilling

Enhanced recovery operations began in 2003

CLR:  67.9 MMboe proved reserves

13,551 net boepd in 2Q 2008

Implementing infield horizontal drilling and re-

entry drilling program to accelerate production

and enhance sweep efficiency

Developing Cedar Hills on 320 acre / producer

Forecast peak at ~21 net Mboepd in late ’09

$184MM in 2008 capex / 5 to 6 drilling rigs

Haley Prospect

77,000 net acres

Extension of Red River B

95 square miles of 3D being acquired

Cedar Hills North Unit

Cedar Hills West Unit

Buffalo

Units

Medicine Pole

Hills West Unit

Medicine Pole

Hills South Unit

Medicine Pole

Hills Unit

25 Miles

25 Miles

Haley

10

Bakken Shale

Largest unconventional oil resource

play in the L48 U.S.

~4B boe technologically recoverable

reserves (USGS)

Play is being developed through hz drilling

and advanced fracture stimulation

CLR is largest leaseholder with

529,000 net acres

Currently have 13 operated rigs drilling,

increasing to 16 by year end

8,445 net boepd in 2Q 2008

70+ rigs operating

ConocoPhillips

EOG Resources

Hess

Marathon

CLR  acreage

Horizontal Bakken producer

Williston    Basin

Outline of  potential

Bakken  production

11

Richland County, MT Bakken

Joann 1-32H (83% WI)

Three Forks/Sanish test

–

late 3Q08 spud

Finnicum

1-25H (48% WI)

–

228 boepd

Lea Joe 1-1H  (63% WI)

–

609 boepd

Constance 3-7H (73% WI)

–

315 boepd

Marla 3-35H (95% WI)

–

236 boepd

Swenseid 3-9H   (95% WI)

–

336 boepd

320-acre single lateral Bakken well

CLR acreage

640-acre tri-lateral Bakken well

Three Forks/Sanish test location

12

Bakken Shale Geologic Cross-Section

20’

60’

40’

120’

Upper Bakken

A

Three Forks

Lodgepole

Middle

Bakken

Lower Bakken

B

Sanish

Sanish

Dolomite/Silty

Dolomite

Shaley

Limestone/Limey Shale

Sand

Shale

Over-pressured, oil bearing rock that is

both source and reservoir for the oil

Upper Bakken Shale

Highly organic (up to 20% TOC)

Brittle due to high silica content

Middle Member

Varies

from

dolomite,

sand,

shaley

lime

and shale across the basin

Porosity is low, averaging 5%

Lower Shale

Similar to Upper Shale

Micro-fractured due to oil generation

Macro-fractured locally due to

tectonics

Depths 8,500’-11,000’

B

Approx. limit of thermally

mature Bakken

MT  ND

Bakken Pinch-out

A

ND Bakken wells

drilled since 12/2003

13

ND Bakken –

Recent Activity

THREE FORKS HORIZONTAL

CLR OPERATED

CLR NON-OPERATED

NO CLR INTEREST

First and second Three Forks/Sanish

wells completed in 2Q08

Bice 1-29H (44% WI) in Dunn Co. (693

gross boepd)

Mathistad 1-35H (40% WI) in McKenzie Co.

(1,260 gross boepd)

Drilling program now targeting TFS

Expect to increase operated rig count

from 10 currently to 12 by year end in ND

Gross wells completed

Net wells completed

Gross 7-day avg. IP   

rate

2Q08

33

8.7

513 boepd

1Q08

13

3.7

455 boepd

14

Interval --

Three Forks/Sanish to Top of Middle Bakken

Northern 2/3s of ND Bakken acreage has

50’

or more separation

Given the low porosity/perm of the rock,

our theory is that the TFS is a separate

reservoir from the Middle Bakken

Exception: Areas where the interval thins

Exception: Areas where there is significant

vertical fracturing due to tectonics

CLR-operated Three Forks/Sanish wells being

drilled or completed.

CLR-operated Three Forks/Sanish wells in

production.

Omlid

1-7H

Maryann 1-15H

Kirkland 1-33H

Croff

1-2H

Mathistad 1-35H –

1,260 boepd

Bice 1-29H –

693 boepd

Ronholdt 1-16H

Oscar 1-25H

Glasoe

1-18H

Elveida

1-33H

Arvid

1-34H

Viola 1-7H

Omar 1-1H

Malcolm 1-29H

Morris 1-23H

Gale 1-32H

Skachenko

1-31H

Sloan 1-17H

15

Arkoma Woodford Shale

Unconventional gas

resource play

40+ industry-operated rigs

(Newfield, Antero, Devon) in the

Arkoma Woodford

CLR: 46,000 net acres

Significant reserve and

production growth potential

$130MM in 2008 capex

Increasing from 5 operated

drilling rigs currently to 7 by year

end

Acquired 26 square miles of 3D

in Salt Creek and acquiring 55

square miles in E. McAlester

Caney Shale upside

12 miles

SALT CREEK

exploratory

EAST MCALESTER

exploratory

4-well Simul-frac 

Avg. 3.5 MMcfd/well

2-well Simul-frac 

Avg. 6.8 MMcfd/well

2-well Simul-fracs 

Scheduled 3Q08

CLR Operated WOC

CLR Operated Producer

CLR 2008 Wells to be drilled

Woodford Producer

CLR Acreage

Inset: CLR 2008

Completed Wells

Inset: CLR 2008

Wells to be drilled

ASHLAND

development

16

ND Bakken & Arkoma Woodford

1.

CLR

internal

economic

model,

based

on

gross

reserves

per

well

of

400,000

boe

for

ND

Bakken

and

3,000

MMcf

for

Woodford. 

2.

Assumes

1

well

per

section

for

ND

Bakken

and

8

wells

per

section

for

Arkoma

Woodford.

Reserve potential

Net reserves/well

Net potential unbooked locations

Reserve potential

Net boe/well

Estimated avg. D&C

Pre-tax IRR

@$80/bbl & $8/Mcf

@$100/bbl & $10/Mcf

ND Bakken

325,000 boe

546

177 MMboe

325,000 boe

$5.8MM

40%

69%

Arkoma

Woodford

2,400 MMcf

541

1.3 Tcf

400,000 boe

$5.0MM

69%

122%

Totals

1,087  

387 MMboe

17

Trenton/Black River –

Hillsdale Co., MI

Single largest field in Michigan --

Albion-Scipio and Stony Point

Field have produced ~190

MMboe.

CLR: 47,000 net acres

10 gross (6.8 net) wells drilled

with 90% success rate as of July

2008

Have applied for DEQ ruling on

increased production allowable,

with response expected

Sept./Oct.

3D seismic being acquired in

preparation for multi-well drilling

program in 4Q

Albion-Scipio Field, discovered in 1956

5 Miles

Albion-Scipio Field

Stoney Point

Hog Heaven

3-D 6.5 mi.

Chicago/Norad

3-D

20 mi. (processing)

Dog Leg 3-D

3-D 4.5 mi.

Kittyhawk

3-D

Fred Bear 3-D

(proposed)

Young 11-34 (testing)

Pridgeon

3-3

(planned

hz)

Lindemann 1-36 –

testing

Clark 1-36 –

5 BOPD

McArthur 1-36 –

110 BOPD

Boardman 1-1 –

200 BOPD

Anspaugh 1-1 –

110 BOPD

Wessel 1-6 –

110 BOPD

Wessel 2-6A–

110 BOPD

Wessel 1-1 –

dry hole

18

Summary

High quality, proved reserve base

Crude oil-concentrated, long-lived, high operated %

Track record of low cost growth through the drill bit

L3 years cash flow from operations $1,075MM  vs. $942MM cash invested

Focused on horizontal drilling in unconventional resource plays

Low risk production growth in Red River Units

~7,500 boepd expected production growth over next 1+ years

Significant future production and reserve growth opportunities in

several emerging plays

387 MMboe unbooked potential reserves in ND Bakken & Arkoma Woodford

vs. 2007 year-end reserves of 135 MMboe

Large acreage position in other emerging shale plays, including Anadarko

Woodford, Marcellus, Rhinestreet, Huron, Atoka, Haynesville and others

Low cash costs with one of the highest net operating margins

Significant valuation and competitive advantage